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2 Taxes That Can Save America's Future

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Americans don't exactly have much faith in their government right now, so excuse me for suggesting that we need to introduce more taxes. But if you consider the enormous benefits that extend from taxing some of society's negative externalities -- the unintended consequences of providing a good or service -- it's much easier to swallow. Several new taxes could close the budget deficit, provide a windfall into future technology research, lower national health-care costs (for everyone), encourage business investment, or simply reduce your household's annual tax burden.

Don't think it will work? There is a pile of evidence showing that tobacco taxes have, in fact, curtailed smoking rates in the past several decades. New York state, which tacks on the highest taxes per pack in the nation, has seen smoking prevalence drop 20% in the decade since 2003-2004. Ironically, tobacco companies are among the best-performing stocks in the past 10 years. I think that bodes well for instituting additional taxes on even bigger negative externalities plaguing our nation.

Carbon tax
I wrote a lengthy article earlier this year detailing the benefits of a national carbon tax. Study after study has called on policymakers to entertain the economic and environmental gains that could come from taxing carbon emissions, one of which from MIT went as far to call it a "win-win-win" proposition. Enacting a tax of $20 for every ton of emitted carbon that rises 4% annually would raise $111 billion in additional tax revenue in 2015 and $337 billion in 2050 (in 2012 dollars). That is some serious coin for Uncle Sam, but what does it mean for the energy industry and consumers?  

Some see an environmental time-bomb with carbon emissions, while others see massive revenue potential. Source: Wikimedia Commons.

Such a tax would act as the ultimate motivation for power generation companies and dirty industrial processes to invest in cleaner, perhaps renewable technologies. Consider that the production tax credit -- a relatively modest subsidy aiding renewable power sources gain market share -- allowed companies such as NextEra (NYSE: NEE  ) to boost American wind generation from just 6 billion kilowatt hours (kWh) in 2000 to 140 billion kWh in 2012. NextEra now has more than 10,000 megawatts (MW) of wind capacity, which makes up 55% of its total portfolio. Imagine what a carbon tax would force the industry to do. 

Perhaps residential solar power would become much more common, thus reducing your energy bills. Technological hurdles stunted solar's rise in the past decade as wind soared to the top, but the gap may be closing. A new report released this week showed that the United States added a record 723 MW of solar capacity in the first quarter. Residential solar added 164 MW and grew 53% year over year -- the largest growth of any segment. Market forces are certainly pointing to a bright future for SunPower (NASDAQ: SPWR  ) and SolarCity (NASDAQ: SCTY  ) , which could really take off if a carbon tax became law.

Where would all of this revenue go? It could pay consumers to offset any increase in energy bills, fund future energy investments such as next-generation nuclear reactors, or help close the budget deficit. Consumers win (economically), future generations win (health), and the only planet we have wins (environmentally). I'd call that a pretty successful tax.

Sugar tax
Austerity and public health concerns have made taxes on sugar, salts, and energy-drink ingredients realities in Denmark, Hungary, and France. Researchers have had a difficult time modeling how taxing sugar would reduce obesity rates, if at all. But if similarities can be drawn between taxing tobacco products and unhealthy foods/ingredients, policymakers have reasons to entertain the idea.  

This soda serving could cost you a couple of extra cents before the end of the decade. Source: Wikimedia Commons.

Why tax sugar? Let's begin by saying that obesity is a very complex issue that is linked to physical activity, diet, genetics, and biochemical responses to your environment, or epigenetics. Although diet fails to account for all cases of obesity, reducing the consumption of unhealthy foods could save billions in health-0care costs each year.

At last count nearly 36% of adults and 17% of children and adolescents in the United States were obese, according to figures released by the Center for Disease Control. That's up markedly from rates just 10 and 20 years ago. The belt-busting trend cost Americans an estimated $190 billion in health care costs in 2011 alone. Therefore, every 1% drop in obesity prevalence that results from a sugar tax would save Americans close to $2 billion in annual health-care costs. What do we have to lose?

In addition, if the performance of the tobacco industry is any gauge, then soft-drink producers such as Coca-Cola (NYSE: KO  ) and PepsiCo (NYSE: PEP  ) have little to fear. It's a bit more complicated than tobacco taxes, however. Blaming increased risk of lung cancer on smoking is much more of a slam-dunk than putting all of the blame of rising obesity rates on sugary drinks alone. So it is easy to see why the two companies and the American Beverage Association spent $70 million on lobbying and advertising from 2009 to 2012 to stamp out proposed sugar taxes in 30 states. Still, I think it's only a matter of time before a state sugar tax successfully passes.  

Foolish bottom line
It won't be easy for these two taxes to become law, but the long-term benefits certainly outweigh the risk of spending more on energy or soft drinks in the short term. They could generate hundreds of billions of dollars in additional tax revenue in their first few years that could be put toward any combination of projects. Better yet, they don't require the tough decisions that have tripped up Congress in recent years. While critics point to the mayhem that increased taxes will create on the industries they affect the most, the performance of the tobacco industry over the past decade shows that taxing negative externalities isn't a death sentence. In fact, the opposite has proved true.

The possibility of sugar taxes isn't the only problem facing Coca-Cola. The company's wide moat has helped provide its shareholders with superior gains in the past, but the company faces some new threats to its continued market dominance. The Motley Fool recently compiled a premium research report containing everything you need to know about Coca-Cola. If you own or are considering owning shares in the company, you'll want to click here now and get started!

Read/Post Comments (37) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 15, 2013, at 12:01 PM, bugmenot wrote:

    This article is stupid. A carbon tax will kill a billion people! The poor and the middle class will suffer as the cost of food and energy skyrocket - the price of everything will sky rocket. Cheap energy is what saved the world! The earth has not warmed in 17 years - according to the IPCC and ALL science. CO2 is plant food - science says food grows better when CO2 is high. Russian and German scientists are concerned about an upcoming little ice age!!! Yes, Eurasia is getting COLDER. When the media hyped junk science, your kids suffer!

  • Report this Comment On June 15, 2013, at 1:40 PM, XMFBreakerTinker wrote:

    Yes, because the money in the pocket of the government is always preferable to money in the pocket of the person who worked for it and earned it and would like to spend it the way that he or she feels fit to. You know, liberty. To be able to choose how one lives their own life. But liberty is not good for us as the government knows better as to how I should live my long as I think proper thoughts and smile, the government will then leave me alone, and since all money is the governments to begin with, we should be happy with what they allow us to keep.

    Yes, got it. Government does not have enough money, the government spends their money so wisely and with so little waste, and it is our fault for not paying the government more money as we are too stupid to live without the government telling us how we are suppose to.

    So I am all for it!

  • Report this Comment On June 15, 2013, at 2:05 PM, SafeToKnow wrote:

    You really are a "FOOL"!!!

    Businesses don't pay taxes - consumers do! The business merely passes all taxes on to consumers. Get real! A business to survive has to make a profit. More taxes just will increase the cost of produce or service to the consumer.

    All taxing governments, federal, state, county and city plus schools, continue to spend without regard for the tax payers (consumers). Remember that it was high taxes that created the move to this country and to the revolution. There is no place to move to avoid the ever increasing government taxing disregarding to very people that they are responsible for protecting.

  • Report this Comment On June 15, 2013, at 2:36 PM, MotleyFoolStinks wrote:

    There's no basis for a carbon tax. You know global warming is a myth.

    The sugar tax is just another way big government is trying to control us.

    How about a comparison of motley fool's stocks picks to the S&P 500? That would really be embarassing for motley fool.

  • Report this Comment On June 15, 2013, at 2:37 PM, TMFBlacknGold wrote:

    If you read my previous, more detailed work on carbon taxes you will see that the costs passed along to consumers could easily be offset and would pay for themselves in cost savings.

    The point is that we can tax negative externalities to ease their burden on society. Cigarette taxes are living proof that it can work if tweaked for the specific case.


  • Report this Comment On June 15, 2013, at 2:38 PM, TMFBlacknGold wrote:

    "How about a comparison of motley fool's stocks picks to the S&P 500? "

    All on the front page of Most of our services are actually beating the S&P500, some handily.


  • Report this Comment On June 15, 2013, at 2:46 PM, Economicmind wrote:

    Mr. Chastko, it would be better for you and those you intend to coerce to have taken a course in college if you actually attended college. This article reads more like a regurgitated high school paper. The only reality is that a carbon tax would take out of the economy another $1000 per citizen per year and would make a few companies who get exempt status or trade in carbon tax credits extremely rich. The only real way to balance the budget is to reduce expenses just like you and everyone else must do if expenses exceed income. You could not go to your employer and ask for a raise every time a new tax comes along could you?! So why is the government different? It is not! But for some unknown reason logic has gone out the window and many like yourself more revenue to the government is the answer. Remember their income is base on ours and at some point, long past, this symbiotic relationship become parasitic. Demand for a supply of revenue does not always equate to a stable economy; in fact taxes destroy the economy just as Thomas Jefferson said.

  • Report this Comment On June 15, 2013, at 2:52 PM, VegasSmitty wrote:

    If taxes are increased there will be an overthrow of the US govt that's will give control back to the people. Maybe them idiots in DC should read about taxation without representation.

  • Report this Comment On June 15, 2013, at 3:00 PM, jeffsp wrote:

    was this article written by al bloomberg? maybe they combined a clone of both of them to come up with this nonsense.

  • Report this Comment On June 15, 2013, at 3:03 PM, LeeG3 wrote:

    I have a problem with every "solution" that starts with the notion that a tax will solve anything! Taxes solve nothing! They only increase the cost to the consumer and add more government overhead to everything that we do.

    I would suggest that if taxing something would make people not use that product, why do people still smoke? I do not buy the argument that the higher taxes in NY caused less smoking. There are less smokers now than back in the '50s but does that have to do with taxes or with the fact that the health concerns with tobacco are more well known now? When I was growing up, it was "cool" to smoke. I don't think that is the case anymore.

    And a carbon tax is flat stupid! We (you, me, and everyone else in the USA) need energy to live our lives. So will we use less energy if there is a carbon tax? NO! We will still have to drive our cars to work, heat our homes against the cold, and power our factories to maintain our jobs. All a carbon tax does is give more money to the government, not improve our lives. Except if you are Al Gore who is set to make a lot of money trading carbon tax credits.

  • Report this Comment On June 15, 2013, at 3:05 PM, TMFBlacknGold wrote:


    The point everyone seems to be missing is that the tax revenue does not have to end up in the government's hands. I encourage you to read the study conducted by MIT (link opens PDF):


  • Report this Comment On June 15, 2013, at 3:09 PM, jeffsp wrote:

    so you want us to give more of OUR money to the gov't that doesn't know how to spend what they already get and that will solve a problem? so typical. we have a problem, so let's throw money at it. doesn't matter that it's not our money, just as long as it's someone else's.

  • Report this Comment On June 15, 2013, at 3:12 PM, jeffsp wrote:

    @tmf, then who's going to collect it? and do you really, honestly think that the gov't is going to watch a "revenue" stream just go right on by and not syphon off it for some other stupid project or program that benefits no one except some group they think they can get to vote for them? what color is the sky in this dream world you live in?

  • Report this Comment On June 15, 2013, at 3:13 PM, jollygreen12 wrote:

    You want a tax system that will work.. Implement the "FAIR TAX". This tax system will collect money from anyone within the United States Legal, or Illegally. This alone would boost revenues by millions a year, if not possibly in the billions. The current taxing system is a failure and is slowly killing America because of two reasons.

    1. Good paying jobs are super hard to find now a days, lowering the tax revenue. If you have the same amount of people making less money. You collect less taxes.. it's simple math.

    2. The growing number of Illegal Aliens (Yes, I call them Illegal) are gaining more and more government assistance while the tax revenue decreases. When you spend more than you take it.. it creates debt.. Simple Math again.

    I have no quarrels with someone coming to this country looking for a better life. Everyone is entitled to that, but if you want the benefits. You need to contribute.

    Implementing the "Fair Tax" would include this demograph as well. So they would be contributing to the system like everyone else. Which in turn would not make me have such terrible feelings towards anyone who's wanting a better life.

  • Report this Comment On June 15, 2013, at 3:14 PM, XMFBiggles wrote:

    Most of the responses to this article are kind of depressing, especially since both of the suggestions make sense.

  • Report this Comment On June 15, 2013, at 3:37 PM, jdassoc15 wrote:

    Your article is quite fascinating ....

    I am certain you are correct that all carbon tax proceeds would find their way back to the american people.

    Just like the trillions of dollars of tax-payer funded banker bailout(s) of 2008 and 2009 so benefited all the people of our mother earth and america.

    Just like the trillions of dollars in taxpayer money that have funded endless wars in Iraq, Libya, Afghanistan, Syria have so benefited all of the people on our mother earth and in america.

    Just like the 17 trillion dollars in debt and the 60 trillion dollars in unfunded mandates by our officials in the US government have so benefited all of the people on our mother earth and in america.

    Just like the 600 million forced abortions in china, a country where there are no carbon restrictions and no regulations on pollution, have benefited all humans on mother earth by masssively reducing the carbon footprint of those potential 600 million carbon emitters and their potential offspring.

    You have amazing insight, and I believe that these new taxes on the american people that you propose are a win, win, win, win, win and a win, just like the examples I have cited above are a win, win, win and a win for all the people of mother earth and for our country as a whole.

    Keep up the good work !

  • Report this Comment On June 15, 2013, at 3:45 PM, LeeG3 wrote:

    Dear TMFBiggles,

    I would disagree that the responses are depressing. The common thread is that the responders are not buying the idea that government taking more tax money from us will fix any problem!

    If anything, it suggests that we want real solutions to fix problems. To use one of the examples, you could raise the tax on tobacco to $100 a pack and people will still smoke. Actually, that is what we did by making drugs illegal instead of a medical condition. Did that stop people from using them? No, it only created more govenment agencies with the corrupting power to abuse our rights.

    The solutions that are proposed in this article DON'T make sense. For most of us, more taxes mean less for us to use as we see fit. What is needed are solutions to problems like the idea of a Flat Tax (which I am not sure would work) to make the process of funding the government more fair.

  • Report this Comment On June 15, 2013, at 3:54 PM, jdassoc15 wrote:

    Oh and I forgot just one more thing ...

    Your grasp of climate science is also very impressive .... just one more win for anyone who has the opportunity to read your article ...

  • Report this Comment On June 15, 2013, at 4:59 PM, kcimos wrote:

    how about an entertainment tax of 99%.

  • Report this Comment On June 15, 2013, at 5:00 PM, kcisobderf wrote:

    I respectfully disagree.

    I echo some of the previous posters as to why the suggested new taxes are bad, but my primary objection is to their severely regressive nature.

    My alternatives are:

    1. A penny/share/trade tax on *all* stock and bond instruments to deter HFT. Note that it's not a percentage of stock price. The idea is that the junkiest stocks and bonds are cheap and most susceptible to collusion and insider trading.

    2. *All* income, regardless of source, is taxed the same. In other words, no carried interest malarkey.

    These are the taxes that will discourage financial engineering/gambling and drive investment money to productive use and employ more people. The best way to improve the health of US Citizens is to make sure they're working in a good job!

  • Report this Comment On June 15, 2013, at 5:17 PM, ImtheBaldEagle wrote:

    Maxx are you insane or just stupid? What makes you think raising more revenue is going to result in closing the budget deficit. Congress has shown us for years upon years that they will spend every dime they take in and then some. Man you need to use your head before you submit an article like this.

  • Report this Comment On June 15, 2013, at 5:51 PM, KenWilder wrote:

    How come alcohol has never been mentioned , which I might say kills X amount of people?

  • Report this Comment On June 15, 2013, at 6:06 PM, KGHarry wrote:

    Just removing subsidies on sugar, high fructose corn syrup and ethanol (it is a sugar) and like should be the first step. Same for the energy coal, oil and gas no subsidies. they all should also pay for restoration of the degradation of land and water they caused first then we can think of the air.

  • Report this Comment On June 15, 2013, at 6:20 PM, Pragmatist76 wrote:

    The Power to tax, when granted, was not seen as a license to practice social engineering.

    When first tried, (Excise Tax on alcohol - 1792), this trick caused an armed rebellion.

    We've grown soft since, though I'd be really like to shoot some pol. over the tobbaco tax mentioned.

    If more taxes are required, and I agree they are,

    let them fall evenly on all, instead of targeting

    vulnerable minorities, however selected.

    Your right to swing your opinions over personal behavior ends at my free choice of legal actions.

  • Report this Comment On June 15, 2013, at 7:46 PM, Ghoztdawg wrote:

    I'm sorry but the people commenting in this thread are either rich white guys who get their "science" & "economic theory" from Faux News or are complete fools (little "f"), or both.

    The entire world is in agreement, Global Warming is "Real" & man made emissions are accelerating the effects of GW.

    Wind is now cheaper than Coal in many places in the world. (and getting cheaper). Solar panels are now selling for 60 cents a watt globally. They are being INSTALLED in Germany for under $2/Watt, which is cheaper than what the German people pay retail.

    A Carbon Tax could easily work. My suggestions would be to use the proceeds in the following ways:

    1. Use 30% as a permanent income tax reduction for the bottom 90% of people who pay income taxes.

    2. Use 20% for upgrading the electrical grid infrastructure. High Voltage Lines etc, to transport energy throughout America efficiently, and to make our energy infrastructure much more reliable.

    3. Use 20% of the money for Roads & Bridges.

    With the gasoline tax taking in less and less as people transition to more efficient vehicles & other fuels (NG, electric, etc). Not to mention our roads & bridges are falling apart and in disrepair anyway.

    4. Use 20% to fund development of market ready Renewable Energy & Efficiency Projects (NOT COMPANIES), such as Solar Plants, Wind Turbines, OTEC, Next Gen. Nuclear, Energy Storage, etc, etc.

    5. Use 5% for High Technology R&D Grants for early stage American Companies, Universities, & Research organizations. A small amount will be set aside to fund an office at Dept. of Energy (or comparable govt. agency) which will evaluate funding applications.

    6. Use 5% to fund the Federal Renewable Energy & Efficiency Department of Management or FREEDOM whose sole purpose will be to make the Federal Government including the Department of Defense completely energy independent by 2030. The US Govt. is the single largest user of energy in the US. We also lose lives every day to resupply our troops with fuel (some of which comes from our enemies)

    Ok, now you guys can all call me an a$$h%le!

  • Report this Comment On June 15, 2013, at 8:21 PM, stevema1 wrote:

    The tree huggers all piss and moan about C02 and yet with the C02 the deserts are starting to come alive and as a side not TREES AND PLANTS NEED C02.

    Tell al gore the bore who tells everyone what they should do while he does what he wants to go screw himself.

  • Report this Comment On June 15, 2013, at 8:37 PM, NoMoeMoney wrote:

    Ahh, Mr Chatsko, that big glass of surgary soda happens to be my drink of choice. I am not overweight and have no medical conditions at 46yrs old. I go to the gym regularly and eat as healthy as the next person. Why should I be forced to pay a sin tax just because people like you think so (Mayor Bloomberg too). Your not looking after my health, your looking for new ways to tax the crap out of people so that the Government or someone else can spend it on wasteful activities. There is such thing as a breaking point for society and with all these new ways to rip off the taxpayer (Obamacare comes to mind) it isn't gonna take much to push people over that cliff.

  • Report this Comment On June 15, 2013, at 8:51 PM, HarshRealities wrote:

    What we really need is a "Politician Spending Tax". For every new expenditure politicians make we should tax the politicians 200% of the cost of that new expenditure. Lats say Congress passes a bill to spend $1 million on a prk barrel spending project. We tax all the politicans $2 million dollars. Now that is a tax I think everyone but the politicians would support.

  • Report this Comment On June 15, 2013, at 9:10 PM, foolnmyself wrote:

    Your a FOOL !

    A Carbon Tax would give Wall St. just another way to make money from nothing!!

    A tobacco taxes (wacky or otherwise) sets a bad, BAD precedent .

    So why not tax Guns at 1000 % of cost, Bullets, Cars, Tacos (too much gas release), Houses over 1000 sq. ft. Maybe SEX cause we are having too many babys for the planet to support. Tax Motorcycles at 1000% .. too unsafe!

    I say ...... TAX ALL WALL St Transactions at .5%

    The USA would be in the Black in 5 years.

  • Report this Comment On June 15, 2013, at 10:20 PM, consAREidiots wrote:

    if most of your traffic comes from yahoo, it stands to reason that idiot conservatives are going to come bash any reality based article.

  • Report this Comment On June 17, 2013, at 11:52 AM, jdassoc15 wrote:

    The percentage of carbon dioxide has risen 0.01% over the past 400 years ...

    The concentration of methane in the atmosphere is 0.000179% ...

    Do these numbers sound like a reason to tax every living, breathing human being for their green house gas footprint ...

    Only uninformed and quite frankly misled people would agree that this is one of the most theratening problems that we as a civilization face ...

    More concerning is the fact that anyone believes this pseudoscience - and that goes for both "democrats" and "republicans". Because I know plenty in each camp that subscribe to this malarkey ...

  • Report this Comment On June 17, 2013, at 2:20 PM, TMFBlacknGold wrote:


    Actually, carbon dioxide has more than doubled since the Industrial Revolution.

    The composition of the atmosphere doesn't explain the effect each of the components have. For instance, if I had a mixture of 10 grams of water and 0.00008 grams of botulinum toxin the latter is clearly what I should be concerned about. Despite making up such a small percentage of the mixture, it is the lethal dose for a 180 pound individual.

    A similar argument can be made for explaining the compounding effects of greenhouse gases.


  • Report this Comment On June 17, 2013, at 2:47 PM, maureenaba wrote:

    As this article points out, obesity is a complex health challenge influenced by a wide range of factors (including genetics, physical activity, stress, etc.). However, there is no evidence that a soda tax will have any effect on obesity, and in fact, a Yale School of Public Health study demonstrates the exact opposite: Education - not laws and regulation - is the key to alleviating obesity in our nation. What’s more, a new tax will only eliminate choices for consumers and disproportionately hurt small businesses.

    -Maureen Beach, American Beverage Association

  • Report this Comment On June 17, 2013, at 3:07 PM, mdk0611 wrote:

    1. "a tax of $20 for every ton of emitted carbon that rises 4% annually." 4% annually FOREVER?

    2. Although one of the comments mentioned it, I saw nothing in your piece about what taxes are going to get cut. Unless there are MANDATORY cuts these revenues would likely end up being spent for IRS Star Trek videos and conferences along with other $40 million boondoggles.

    3. Why enact a tax on sugar when all you have to do is reduce subsidies? Were you even aware of the existence of those subsidies?

    4. "If you drive a car, I'll tax the street

    If you try to sit I'll tax your seat


    If you take a walk, I'll tax your feet

    Cause I'm the taxman"

    - George Harrison

  • Report this Comment On June 18, 2013, at 10:03 AM, jdassoc15 wrote:


    I realize that you believe in the theory of "climate change" ... mind you, that this is the new moniker because temperatures never reached what the original climate models predicted when this theory was referred to as "global warming".

    Tropopheric temperature measurements have not shown a significant rise in global temeratures since 1998.

    The CO2 level has risen from 280 parts per million to 400 parts per million over the past roughly 400 years. In percentage of the atmosphere that correlates 0.028% to 0.04 %

    Your comparison of a deadly toxin to carbon dioxide is a classic technique to sell this theory i.e. calling CO2 a pollutant. The average composition of the air in an indoor office is about 2,000 to 3,000 parts per million i.e. 0.2 to 0.3 % of ths air.

    How on earth do people survive a day at work with such a toxic dose of carbon dioxide ?

    The crux of this theory is how sensitive the earth's massive and complex climate is to a change of 0.012% in the CO2 level in the atmosphere.

    It is either incredibly sensitive, creating an unmanageable amount of new raduative forcing, or it is not.

    There are simply thousands of scientists who believe that solar output and the trillions of gallons of water in our oceans, both of which have infinitely more impact on the heat capacity of our atmosphere, are the primary drivers of our earth's climate.

    In other words, they believe that the radiative forcing created by the 0.012% increase in CO2 over 400 years is miniscule at best.

    If you would like to know more about the theory of climate sensitivity you should check out Dr. Roy Spencer's website. He is one of the main people involved in the tropospheric satellite temperature measurements in huntsville, alabama.

  • Report this Comment On June 18, 2013, at 10:43 AM, damilkman wrote:

    This article is very bad regardless of economical opinions as the science is about as bad as I have ever seen on MF.

    We will begin with sin taxes. The author assumes that the reduction in smoking is due to increased taxes. Yet no credit is given to the MASSIVE antismoking campaigns initiated at all levels to curtail smoking and discourage young people from beginning before addiction. Yet it is all about the cost. Does anyone on the Motley Fool ever witnessed someone who quit smoking or drinking because it was too expensive? People who like their alcohol and smokes will skip everything else to guarantee keeping up with their addictions. Speaking of alcohol, funny that it is not even mentioned. If smoking is so bad for you why not drinking? Does the tax on alcohol prevent drinking also? Is our author an alcoholic :) Maybe the author makes big money on the ridiculous ethanol subsidies and mandates.

    Now we will go to the sugar tax and its insanity. Completely overlooked is that all carbohydrates are just sugars bound together. Taxing sugar and only sugar and blaming only sugar on obesity is crazy. If you do not address America's addiction to grains you will not make a dent in obesity with a tax. So what does the author propose? That we put a big tax on bread or the grain that we feed our livestock? Take a look at the chemical changes that occur to a cow when you replace its grass diet with corn.

    I promsied I would not say anything about economics but this article is just too much for me. This is classic liberalism. All of these taxes ultimately hurt poor people. People who are well off will not have a problem having to pay incrementally higher taxes on sin items or on carbon based energy. Poor people do not have this option. If you exclude poor people everyone else is going to clamor for a break also. Then you are stuck with a minority paying for the difference and building resentment.

    The way I see these kinds of taxes as even remotely useful is if you change your tax code from taxes on income to primarilly VAT and tax consumption. Get rid of all tax loopholes and just tax economic activity.

  • Report this Comment On June 19, 2013, at 3:40 PM, TMFBlacknGold wrote:

    "Yet no credit is given to the MASSIVE antismoking campaigns initiated at all levels to curtail smoking and discourage young people from beginning before addiction."

    ^Paid for by cigarette tax revenue. Several studies have already demonstrated that the tax has in fact reduced smoking rates:


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